Travel Insurance and COVID-19: Essential Coverage Insights for Travelers

The rapid spread of the coronavirus (COVID-19) raised concerns among families, healthcare professionals, policymakers, and travelers alike. At the time, the Centers for Disease Control and Prevention (CDC) advised against nonessential travel to high-risk areas including China, Iran, South Korea, Italy—and Japan for seniors or those at higher risk.

As the virus reached Lombardy, Italy's outbreak epicenter, the U.S. Department of State issued a Level 3 travel advisory (on a 1-4 scale). This triggered a surge in demand for insurance covering potential cancellations: “Our calls spiked 400 percent in one week,” noted Kasara Barto, spokeswoman for Squaremouth.com, a leading online travel insurance comparison site.

Discover what travel insurance can—and cannot—cover amid COVID-19 risks.

First, a primer: What is travel insurance?

Travel insurance primarily safeguards against two scenarios: pre-trip cancellation and post-departure interruption, explains Stan Sandberg, co-founder of TravelInsurance.com.

Trip cancellation reimburses nonrefundable payments for unforeseen events like illness, severe weather, or natural disasters.

Trip interruption covers issues after departure, such as medical emergencies, delays, or lost baggage, reimbursing unused nonrefundable portions.

Standard policies—typically 4-10% of trip cost—often include basic medical coverage alongside cancellation and interruption benefits.

Does it cover cancellations due to viral outbreaks?

Standard policies exclude fear of disease or similar concerns.

For flexibility, opt for Cancel For Any Reason (CFAR) coverage, allowing withdrawal up to 2-3 days before departure with 50-75% reimbursement. CFAR adds 50-60% to premiums; not all providers offer it, but Squaremouth's filters help identify options.

CFAR caveats: Purchase within 1-3 weeks of booking (vs. standard anytime); insure 100% of trip costs; unavailable in New York.

Does it cover contracting COVID-19 while traveling?

It depends. Many insurers treat COVID-19 as a 'known risk' post-January 21, 2020, excluding coverage (similar to insuring after a hurricane is named).

If traveling to outbreak areas, confirm exclusions directly with the insurer, advises Sandberg. Pre-trip illness may still qualify for cancellation.

For low-risk destinations, medical coverage might apply unless pandemics are explicitly excluded. Providers like World Nomads—adventure travel specialists—omit such clauses. Example: A week in Switzerland cost $72-$118, covering up to $100,000 medical, $300,000-$500,000 evacuation, and $2,500-$10,000 interruption.

Avoiding the wrong policy?

Yes—most offer a 10-day 'look period' for full refunds. “COVID-19 is uncharted territory,” says Sandberg, but thorough comparison and phone verification ensure proper protection for your plans.